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Putin Strikeouts Obama __ Will Barry Do Something Stupid?

To no one’s surprise, the people of Crimea voted overwhelmingly yesterday to become part of Russia. In a few days or a few months, it will be a fait accompli and the Crimea will once again be part of Russia.

That is Strike 3, Barry!

Strike 1 _ Barry’s Russian Reset was a one-sided when for Putin. Barry agreed not to build the missile shield in Eastern Europe and Putin agreed to accept that idea.

Strike 2 _ Barry was all puffed up after tumbling the governments of Egypt and Libya he thought he could do the same thing in Syria. But, Putin threw him a curve ball and Barry whiffed.

Strike 3 _ Barry and his friends in the EU have had their eye on the Ukraine for a long time. The EU would like the Ukraine to come into their fold so that they are in a better position to negotiate gas price with the Russians. Barry and his NATO allies would like to pressure Russia by having NATO forces on the Russian border. You can see why Putin might see these intentions being against Russian interests. So, the recent ouster of Ukraine’s “democratically” elected president was seen by Putin as a coup that was funded secretly by Barry and his EU buddies. (Ask yourself if the governments of France or Canada had been overthrown in the same manner would the US and the EU have been so quick to recognize the new governments?) At any rate, Barry and his friends over played their hand and apparently didn’t expect Putin to react so decidedly and quickly.

Barry is complaining that Putin’s Crimean pitch was low and outside. He has warned Putin that Russia would pay a price for what they have done. Putin warned Barry that hurting the Russian economy would backfire on the US.

Will Barry do something stupid? Is Putin bluffing? I think the answer to the first question is yes and the answer to the second question is no.

The White House has announced new sanctions against seven Russian officials in retaliation for Ukraine’s Crimea region voting to join Russia, as the European Union announced similar penalties.

If that is the sum total of what Barry and the EU are prepared to do, then no real harm and no foul. However, if they go much further, their sanctions on Russia are likely to backfire in Barry’s face and the same for Europe. Here is another quote from that Fox News article:

Before Monday’s meeting in Brussels, German Foreign Minister Frank-Walter Steinmeier said sanctions must leave “ways and possibilities open to prevent a further escalation that could lead to the division of Europe.”

Could lead to the division of Europe? He’s talking about Germany of course. This article may explain his concern:

Anton Börner, president of the German Association of Exporters (BGA), which represents 120,000 companies, the lifeblood of the economy, warned at a press conference in Berlin that further escalation of the crisis in the Ukraine could hit exporters very hard. He said that the BGA expected exports to rise 3% to €1.13 trillion and imports 2% to €914 billion for a trade surplus of €215.6 billion – the highest in history. But “if the crisis in the Crimea escalates further,” these wondrous forecasts of endlessly growing exports and surpluses “could turn very quickly into a mal-calculation.”

{…}

It isn’t just German exporters that are fretting, and lobbying with all their might. Russia, with an economy that is already stagnating, and dogged by vicious bouts of capital flight, has$732 billion in foreign debt. Relatively little of it is sovereign debt, but nearly $700 billion is owed by banks and corporations – most of them owned or controlled by the Kremlin. Oil major Rosneft and gas mastodon Gazprom owe $90 billion combined to foreign entities; the four state banks Sberbank, VTB, VEB, and Rosselkhozbank owe $60 billion. Some of this debt matures this year and next year.

{…}

Some European banks, including some German banks, might crater. Even the possibility of a major loss would further rattle the confidence in these banks with their over-leveraged and inscrutable balance sheets and their assets that are still exuding whiffs of putrefaction. And this sort of fiasco, as the financial crisis has made clear, has an unpleasant way of snowballing – and taking down the already shaky global economy with it.

Yes indeed! One should be careful about those unintended consequences. But, if Barry goes too far, Russia has promised to attack the US dollar. How could a small economy like Russia harm the mighty US dollar, you ask? This excellent article explains (H/T to my friend, 5etester):

From the economic point of view, everyone should get ready for tough actions from Moscow. Sergei Glazyev, the most hardline of Putin’s advisors, sketched the retaliation strategy: Drop the dollar, sell US Treasuries, encourage Russian companies to default on their dollar-denominated debts, and create an alternative currency system (reference currency) with the BRICS and hydrocarbon producers like Venezuela and Iran.

{…}

“Why should we have dollar contracts with China, India, Turkey?” he said. “Why do we need this? We must have contracts in national currencies. And this applies to energy and other spheres.” The focus would be on Russian oil and gas companies. “They must be braver in signing contracts in rubles and the currencies of partner-countries,” he said. “I think now there is an additional impetus to finally finish this job.”

And the “currency reserve policy” would need some adjustment with maximum focus on “local currencies”; it was the normal way, he said. In Mândrăşescu’s analysis, Ulyukaev was outlining an attack on the petrodollar system and the enormous advantages it confers on the US, with the goal of creating parallel petro-currencies.

Russia would need the help of China to bring down the dollar and that could very well happen.

I want to believe that Barry has some smart people advising him on the dangers of pushing Putin too far. But will he listen to them?

I agree that Obama is a weak little President, ill suited for the office He unfortunately holds. That said, and acknowledging that I have little understanding of the situation in the Ukraine, there appear to be reasons to support neither side, as this article suggests. I would be interested in your views concerning the points made there.

It’s a very different world today than it was only a few years ago. Israel has to do what is in their best interest. That may mean warming up to the Saudis, the Chinese, and the Russians. The US, under Obama, has all but abandoned the Middle East. Russia and China are not into nation building. The oil and gas in the region (Iran and Iraq) and from the Caspiean Sea and Turkministan are the priority. To capitalize on all that oil and gas, Russia and China need stability in the region. Do they think MAD (nuclear Pakistan, Iran, Saudi Arabia, and Israeel) is the answer? I don’t know.

Isn’t it interesting how many now call Putin Russia’s Reagan? The difference this time is both Putin and Obama want to see America knocked off its throne.

No doubt Putin has already run through the scenarios of the global response to Crimea. Bluster from Kerry and Obama is laughable.

China is the key. If they back Russia and take on the dollar, the global meltdown occurs. Why wouldn’t Putin and Xi Jinping believe they would be better positioned to recover faster and surpass the U.S. in a post-dollar reserve world?

High stakes gambling to be sure and we have an amateur community organizer playing our hand. Yikes!

Putin is playing Obama for the fool he is! Once Obama dropped the missile defense Putin knew he had Obama where he wanted him. The ironic part of this whole thing is that Obama told Russia he could be more flexible after the election was over but the one who has become more flexible is Putin and now he is flexing his muscles.

Obama is already doing something stupid–his lack of a coherent foreign policy is stupidity personified. The real question is whether, beyond his lack of a coherent foreign policy, he will cause harm to others with some foreign policy gambit. Since he is first and foremost a ditherer, this is doubtful. Putin has his number–Obama is all preening and bluster, but no substance.

I met a woman who was at IAPAC recently, 14,000 people. She was a Jew who was so excited John Kerry had come to talk as well as Netanyahu. I WISH we’d been in a situation where I could have said “Kerry? How’s the Obama administration doing for Israel in YOUR opinion!?”
petermc3’s comment cracked me up. No McCain fan HERE, but we do need someone other than the wimps Obama’s relying on at this point………..I have to admit this is one tough situation, but would that we had someone who at least listens to the experts.
Yes, Putin IS laughing himself silly over all of this…..and will take every advantage to get as much as he can while Obama’s remaining “Flexible.”